A Shift in LIRC's Worker's Comp Decisions: What Does the Data Show?

Posted on Fri Nov 11th, 2016 at 8:31 am

A Shift in LIRC's Worker's Comp Decisions: What Does the Data Show?

Attorneys, claims representatives, employers, and other "regulars" in the worker's compensation system are often willing to share their impressions of how the Labor & Industrial Review Commission are currently handling cases, that is whether LIRC seem to be more employee leaning or more employer leaning or somewhere in the middle. Of course those impressions are largely anecdotal; they're based on a single individual's recent experience or perhaps the combination of their own and their colleagues' experience. While the combined input of a larger group may give a more representative snapshot, state-wide statistics are the best way to assess the types of decisions that accumulate from LIRC over the course of years. Fortunately, that information is publicly available and paints an interesting picture of trends in LIRC decisions over the past decade or so.

Statistical accuracy is, of course, dependent on having a reasonable-sized pool of data with which to work. However, even with statewide combined data, there is still a somewhat limited pool of worker's compensation decisions from LIRC over the course of a given year. Between 2003 and 2015, an average of 266 cases were decided by LIRC, with the yearly count ranging from 177 to 455. Nonetheless, while some notable year to year variance in decision patterns can be explained by the smaller pool of data, there are more pronounced patterns that are certainly statistically significant.

Statistics for decisions from LIRC are available dating to 1995, but the reports are organized and sorted differently prior to 2003, thus it is impossible to accurately correlate statistics from between the two periods using available data. However, information from 2003 to the present is still quite instructive. There is an interesting change in the volume of cases, but more significant are the trends in decisions; that is, in the percentage of cases affirmed and reversed.

First, it is interesting to note that the current LIRC is being presented with fewer worker's compensation appeals than a decade ago. Since 2011, LIRC has decided an average of 200 cases annually, ranging from a low of 177 cases to a high of 230 cases. However, from 2003 to 2008, LIRC was deciding an average of nearly 330 cases per year, including a high of 455 cases in 2005. Even removing the outlier 2005 tally, LIRC still averaged 304 cases per year, 50 percent more than during the more recent period. Separate figures for overall claims reported per year with the Worker's Compensation Division show an average of a 1 percent per year decline, which clearly does not directly correlate with the marked decrease in the number of cases appealed to and decided by LIRC in the relevant time periods. For whatever reasons, fewer cases are being appealed by both applicants and respondents.

Generally, over the years in question, the ratio of appeals by applicants versus respondents hovers at around a 50:50 ratio; with only slight variances, the number of appeals by respondents matches the number of appeals by applicants. The more interesting statistics are those related to the percentages of cases affirmed and reversed. For appeals initiated by applicants, the percentage of cases affirmed (that is, cases in which there was presumably a defense-oriented decision from LIRC), remained generally steady at around 65 percent, with modest variance from year to year, and perhaps a slight increase in affirmed cases in the last three years. Thus for cases in which the applicant had an unfavorable result, those decisions have been confirmed on appeal on a steady 65 percent basis from 2003 to 2015. Similarly, decisions that were affirmed in part and reversed in part remained steady at around 6 percent.

For those same applicant-initiated appeals, the number of decisions that showed the decision reversed rather than affirmed (in other words, cases with presumably defense-oriented decisions that were changed to applicant-oriented decisions) has dropped quite notably in the past couple years. During the period from 2003 to 2013, the percentage of reversals averaged about 12 percent, although those figures already tailed off to 8 percent and 6 percent in 2010 and 2011, respectively. However for 2014 and 2015, only 1 percent and 2 percent, respectively, of the appeals brought by applicants ended in reversals. While the overall percentage of reversals on applicant's appeals is small during the entire period, the ratio went down substantially from a slightly better than 1 in 9 chance of reversal to about a 1 in 50 or less chance of reversal within the past couple years. (Note that percentages of cases affirmed, affirmed in part and reversed in part, and reversed in whole do not add up to 100 percent, as the statistics also include cases that were remanded for compromise, withdrawn, dismissed, etc.)

Not surprisingly, while the fortunes of applicants have gone down noticeably over the past few years, respondents' appeals have fared markedly better in the same period. For appeals initiated by respondents from 2003 to 2013, an average of 63 percent of cases were affirmed. In 2014 and 2015, those figures dropped to 38 percent and 37 percent, respectively. In other words, the odds of an applicant-oriented decision being affirmed when appealed by the respondent (with the applicant-favorable decision standing) reduced by nearly half; during the earlier period nearly 2 out of 3 cases were affirmed, while in the last two years, just over 1 in 3 cases were affirmed.

Similarly marked changes are seen in the figures covering reversals in respondent-initiated appeals. During the period from 2003 to 2013, 6 percent of appeals were reversed by LIRC. However in 2014 and 2015, those percentages increased to 20 percent and 26 percent, respectively. Again, this is a marked change in the ratios; in the earlier period, respondents successfully had cases reversed in about 1 in 16 cases, while over the last two years those odds have increased to about 1 in 4. When taking into account both full reversals and cases which are affirmed in part and reversed in part, the statistics are similarly favorable to the respondents; in 2014 a total of 28 percent of cases were at least partially reversed, while in 2015, a very substantial 40% of cases were at least partially reversed.

As many may be aware, LIRC is made up of appointees by the governor. As such, the makeup of LIRC will tend to shift as the political winds of the state shift. Commissioners sit for a six year term and their appointments are staggered such that a commission seat theoretically turns over every two years. The makeup of the commission, therefore, may change depending on the politics of the current governor, but the staggered appointments means that changes occur more slowly. As we're currently well into the second term of the current governor (and due to some early retirements), it would be expected to see a Commission that is more "employer-friendly" than several years ago.

Updated statistics will show whether this trend continues or is an aberration. For the moment, however, it seems clear that respondents aggrieved by a decision at hearing have a much great chance of at least partial relief by appealing the matter to LIRC.

Shifts in decision patterns with LIRC may affect recommendations for case handling, including strategy for hearing or for appeal. If you have questions about a case or are interested in a presentation on the impact of current trends, please contact Matt Siderits or Kurt Anderson